The attack is Mr. Morsi's first security crisis, and also poses a diplomatic challenge – his predecessor, ousted leader Hosni Mubarak, worked closely with Israel on security matters in the Sinai. Israeli officials have made repeated warnings about deteriorating security in the area since the Egyptian revolution.

Militants dressed in traditional Bedouin clothing reportedly attacked Egyptian border guards as they stopped work at sunset to break the Ramadan fast. The militants managed to then hijack armored vehicles and sought to launch a cross-border attack against Israel. The fighters breached the border before Israeli forces stopped them, killing the eight attackers. Mr. Morsi has already met with the military leaders to discuss a response.

“Those who carried out this crime will pay dearly,” said Mr. Morsi, according to the Guardian. “Clear orders have been given to our armed forces and police to chase and arrest those who carried out this assault on our children. The forces will impose full control over these areas of Sinai.”

The attack sparked major concerns in Israel, where officials have expressed worries about the security of the Sinai after the ouster of former Egyptian president Hosni Mubarak. During a segment on Israeli army radio, Yoav Mordechai, the senior Israeli military spokesman, alleged that the Sinai has “become a hothouse for world terrorism because of the weak control exercised” by Egypt, reports the Telegraph.

“The entire border area has been sealed with very heavy security on all the roads leading up to Sinai, and not just the border area,” reported Al Jazeera's Rawya Rageh.

Egyptian security forces surrounded the town of Rafah, one of the main Egyptian towns along the border with Israel, early this morning in an effort to stop any remaining gunmen from escaping, reports the BBC. Morsi has also said that his forces are pursuing those behind the “cowardly” attacks, and he is confident they will apprehend those responsible.

Keeping the Sinai peninsula demilitarized is the cornerstone of the 1979 peace treaty between Egypt and Israel. When Egyptian forces sent extra tanks to reinforce their troops on the Sinai last year, Israel had to agree to the terms.